Summary

In XL v Little (May 2019), the Commercial Court granted a final anti-suit injunction to prevent Mr Little, a US individual, from bringing his D&O claim in New York in breach of the insurance policy’s London arbitration provision. The Commercial Court notably reached this conclusion despite the fact that XL denied that Mr Little was covered by the insurance policy. The court found that XL was not being “sneaky” (as alleged by Mr Little’s attorney) by obtaining a UK injunction restraining Mr Little’s attempt to litigate in the US.

Background

Following his employment as a director at an international bank in New York between 2010 and 2013, the US Federal Reserve brought proceedings against Mr Little contending that he had manipulated Foreign Exchange benchmarks, which Mr Little denied.

Mr Little subsequently initiated a number of claims in the US against XL including declaratory relief proceedings seeking to confirm that the D&O insurance policy issued to Mr Little’s former employer covered the costs of his defence in the Federal Reserve proceedings.

The Policy was governed by English law and any dispute arising under it was to be determined at the London Court of International Arbitration. XL denied that Mr Little was covered by the Policy, however maintained that, if he was covered by the Policy, he would be obliged to arbitrate his claims in accordance with the terms of the Policy.

Decision

XL’s application for an injunction was successful.

The Commercial Court held that it was just and appropriate to prevent Mr Little continuing with his claims outside London. There was no reason why Mr Little’s claims could not be arbitrated. The US proceedings were not very advanced and there would be no hardship to Mr Little, in contrast with the potential costs and inconvenience to XL in challenging jurisdiction and the US proceedings.

Notably the Commercial Court made clear that although XL denied that Mr Little was covered under the Policy this did not prevent injunctive relief being granted to require him to seek any recovery he claimed was due under the Policy by Arbitration in London, in accordance with the Policy terms.

BCLP comment

The Commercial Court’s decision serves as an important reminder of the English courts’ wide jurisdiction to restrain foreign proceedings in breach of an arbitration agreement and conforms with their recent approach to supporting the arbitral process. The Commercial Court here recognised the value in being able to have all claims arising under a policy or contract determined in a particular jurisdiction, which is often a key factor for parties considering making provision for arbitration.


This article was co-written by Trainee Solicitor James Davies.